Enforcement of U.S. Sanctions Benefits Local Prosecutors, Data Shows
27 Dec 2019

An increase in the enforcement of U.S. economic sanctions has led to a windfall for local prosecutors in Manhattan.

Corporate penalties related to economic sanctions violations have pulled in about $4.6 billion in penalties and forfeitures for the Manhattan district attorney’s office since 2000, according to a Wall Street Journal analysis of data compiled by Good Jobs First, a nonprofit. Penalties in the past two years alone have accounted for 17% of that total.

“Our investigations have changed the way that banks do business, and shut off spigots of funds flowing to terrorists, human rights violators, traffickers, money launderers, and others who threaten our city, our nation, and our allies around the world,” Manhattan District Attorney Cyrus Vance Jr. said in a statement.

The criminal cases, often conducted jointly with federal agencies such as the Justice Department and the Treasury Department’s Office of Foreign Assets Control, usually alleged that foreign banks broke New York state laws by falsifying business records. Such cases are brought to protect the financial market in New York and to combat terrorism finance, a spokesman for the Manhattan DA’s office said.

Asset forfeiture from economic and white-collar crime cases, including sanctions violations, has enabled the office to invest in crime prevention and justice system reform, Mr. Vance said. The forfeitures are also distributed to the treasuries of New York City and the state.

Good Jobs First, a Washington, D.C.-based nonprofit that promotes corporate and government accountability, tracked corporate misconduct cases brought by local prosecutors in the nation’s 50 largest cities and 50 largest counties that resulted in fines or settlements since 2000 as part of the latest expansion of its Violation Tracker database.

Across the jurisdictions, there were about 565 corporate misconduct cases that amounted to about $7.2 billion in penalties during the roughly 20-year period. The alleged violations ranged from bribery and fraud to food safety and zoning violations.

Local prosecutors in California have brought the highest number of successful cases against alleged business misconduct, securing about $2.3 billion in settlements or penalties from 441 lawsuits since 2000, according to the data. Most of the cases were charges on issues such as consumer protection violations and environmental violations.

New York’s district attorneys, meanwhile, topped counterparts in other states in receiving the most penalty dollars of $4.9 billion from 88 suits, which included cases on alleged wage-and-hour violations and anti-money-laundering deficiencies.

The bulk of the total—$4.6 billion—was due to a dozen large criminal cases against major foreign banks for alleged violations of U.S. economic sanctions and New York state law within the last decade, according to Philip Mattera, head of the corporate research project at Good Jobs First.

The largest corporate misconduct case for the Manhattan district attorney, according to the data, was a joint investigation with multiple federal and state authorities against French bank BNP Paribas SA for violating U.S. sanctions and processing transactions on behalf of clients blacklisted by the U.S.

By Mengqi Sun, The Wall Street Journal, 26 December 2019

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